Festivals and marketing

The Dragon Boat Festival is coming on May 28th. Then in the following 3 days Chinese people will have a "short-vacation". There are four short-vacations every year, apart from the traditional Spring Festival Holiday(About two weeks long). Browsing all kinds of Chinese web sites or business portals, one can see various discussions on how to conduct a marketing campaign in the holiday. For example, I clicked the Chinese Google and searched for " Dragon Boat Festival and Marketing". 5,830,000 items showed up. "Baidu" & "Alibaba" and other major search engines/portals also have millions of discussions in communities. Among all the repetitive news and "good ideas" of marketing, I found something new and interesting.

There is a piece of news saying that the sales of import red wines has surpassed the traditional distilled spirits in China during the pre-festival marketing. The reporter wrote , according to feedbacks from all major super stores, the red wines are ranked on the top sales, particularly the gift packages. A director of the national import wine department told the media that they imported 100 kinds of red wines in 2008. This year, they plan to introduce another 300 kinds of wines. About 50% of those import wines will be in the price range of us$14~16. Chinese people are getting used to drinking red wines, the global financial crisis has not had impact on the domestic consumption in China, the directed commented. In future, the increasing consumption of red wine will become a normal thing, he added. The news has had a very strong response to my analysis in early March when I emailed to a lot of wineries in Washington state. No one bothered to reply.

　　

The most important thing for the Dragon Boat Festival is making and eating Zongzi(Sticky rice wrapper)　People use clean reed leaf or indicalamus leaf to wrap sticky rice, plus some red beans, or meat/sausages. Then they tie those wrappers tight with thin rope and boil them. The rice wrappers to Chinese people is same like the chocolate to the western people in Valentine. The legend has it that a famous patriotic poet( also an exiled official) jumped to a river and got drowned when he heard that his loved country was occupied by enemy. People along the river heard of his death, so they rowed their boats in a hurry to the place and to mourn for him. Some people picked the reed leaf and wrapped rice in it, and threw those wrappers into river, in a hope that the poet's body could be saved from living creatures in the river. Later the boat and rice wrapper becomes national activities. According to historical record, the poet died of drowning around 278 B.C. The festival was then passed down generation after generation. Later it was introduced to some Asian countries. One of them even converted it into their national culture.

Chinese Business and Culture -note 003

The commerce and the merchants have been excluded from the mainstream culture in China for hundreds of years until late 1970s. To "Let some people get rich faster" became a hot phrase and a part of the national policy then. All of sudden, money and profit jumped to the top rank of topics. Quest of wealth was no long a guilty business. People have since then realized that it is a great honor to make money and get rich. Nowadays, one can hardly tell the difference between the Literati and Pop culture in terms of business. But as I know, in the mainland China, in Taiwan, in Hong Kong, there are still a fairly small group of intellectuals who firmly hold on their beliefs and values. Some of them willingly lead a poor and simple life. I'd like to pay my sincere respect to them.

Because of its long traditional culture and its unparalleled dominance and influence on all commercial activities in China, either ancient or present, Chinese business culture displays its multiple-sided kaleidoscope to the outside world. From the famous 10 commercial coalitions in ancient time to the the five "Neo Commercial Groups" theoretically existed in present time, from the well known five fundamental virtues to the notorious officialdom and corruptions that have tightly clung to the business practices for hundreds of years, people have watched and tired to find out what is the true face of Chinese business culture. It is not easy to present a complete ,full colored description on the Chinese business culture. It is hard not only if you are a foreigner but also to many Chinese who have little interest in their own traditions and culture.

I'd like to share an old Chinese allegory with you. It is about a group of blind men and an elephant. A few words before I start the story. I'll apologize if someone feel offended by "blind people". I don't have the least intention to make fun of them. Please just treat the story as a philosophic metaphor. A group of blind men went to learn about a elephant that was strange to the town. They decided to "touch an elephant to learn what it is like. Each one touches a different part, but only one part, such as the side or the tusk. They then compare notes on what they felt, and learn they are in complete disagreement. The story is used to indicate that reality may be viewed differently depending upon one's perspective, suggesting that what seems an absolute truth may be relative due to the deceptive nature of half-truths." ( excerption from the Wikipedia).

Now I am going to offer the parts I have felt about the Chinese business culture.

Every culture has its cultural carriers and legacy. So does the Chinese culture. Let's begin with a great figure - Lao Zi. He is the founder of Taoism and the author of the great book titled [ Tao Te Ching] ( Dao De Jing). It is full of wisdoms with "Yin " & "Yang". One of the most quoted scriptures is "Bad luck, alas, good fortune's underlays, good luck, alas, misfortune's hiding place" (translations by Hilmar Klaus). People always use it to cheer up the lost or suffered and to cool those who are overwhelmed with success.

There is another book that is also summed up the wisdom in Chinese culture and collected the best strategic planning and designs . "The Art of War" by Sun Tzu is always the top reading that I recommend for friends. Usually people like to treat it as the military works. However, more business people around the world, especially in Japan and Korea and countries in Pacific rim, are realizing its importance and it "know-how" for business. In China, almost everyone in business world can use a few quotations from the book or talk with you about the 36 stratagems, which was evolved later for battles. "The Marketplace is just like a battlefield". If you decide to develop business there, then this is a book I strongly recommend. You must read or at least have some knowledge of it. I'll write articles on the book and the 36 stratagems in my later posts.

Distilled spirits and wines are big topics in business culture. About 80% of Chinese people prefer distilled spirits than wines. Ladies, if drinking any, wines are their priority selection. Beers are universally acceptable. I don't encourage anybody here to develop a drinking habit simply because you want to make money in China market. I just want to tell you that this "stuff" is a super good lubricant to build a successful network for business. I'll talk more about this "alcohol culture" later. You will learn to understand their feelings and to know whether you will close your deal or not, just by watching their ways of drinking and eating. Another good catalyst of improving "guanxi" is the smoking cigarette. Since it is a kind of nuisance. I will have a light touch on it in future. Tea is important. It is also a ritual to greet a guest. Don't be afraid of the steaming hot cup with a lot of loose tea leaves floating within. We Chinese have drunk that kind of tea for thousands of years. Usually a Chinese man doesn't drink tea bags since it may confuse him whether he is drinking tea or the paper bag. It will be interesting to know how a host use tea to indicate his/her feeling for you. Again, later.

Have you ever heard of "Food Culture". Be honest, I have just heard of this phrase in recent years when reading Chinese news or articles. I look it as a typical combination of 'Literati" and "Pop Culture". When the food is labeled as a cultural item it will get a great added value. The Chinese food and the dinner table for business are added a value much greater than anywhere else. A dinner table is not a dinner table to you, actually, it is the extension of your negotiation table. I believe there mus t be a tons of stories you can hear from those who have had business experience in China.

The food served, the people present or even what to drink can tell you about the negotiation process. Chinese people are so fond of food that they can settle everything on the dinner table. Thus it has been a huge spending in all places, governmental offices, enterprises, personal activities. You name it. Years ago, a famous Chinese talk show comedian talked about this lavishing habit in his show. He said that a top-level executive liked to dine out, of course on the company's account. So he checked the calendar and marked every event date and anniversary and use them as reasons for dining out. He even marked February ,22 as a dinner-out day because it was the birthday of George Washington.

Chinese Business and Culture -note2

After the year of 1911 when the Qing Dynasty was overthrown, a group of western people went to visit their Chinese friend in Beijing. Their Chinese friend was so happy to see old friends and showed them around in Beijing. Their Beijing friend acted as a very good tour guide and told them how great and graceful the Chinese culture was. Then One of his western friends asked him why they could see a sign sitting in front of almost every store on both sides of streets. That sign says: Fair Trade, No Cheating Here. He continued that there must be a lot of cheating if everybody tried to declare innocence. The Chinese was wordless.

I guess, when I posted the last article, some people, especially those who have had business experience in China, good or bad, would have the similar question. It is true that some foreign businesses lost and suffered from fraudulence and cheating in their transactions with some Chinese business people while other foreign businesses succeeded in China. The most justifiable explanation is the human nature, greedy desire. If we put such instances in Chinese culture and make an analysis, we can realize how and why commerce had been so miserably treated in China until 30 years ago.

Historically, Chinese culture is composed of two totally different styles. Literati and Pop cultures. Commerce has been laid in the bottom of the Pop culture. They began to gain some social status when the old commercial coalitions came into being about 150 years ago. Now, words like "commerce", "business" and "trade" are absolutely among the most frequently used vocabulary list. For a certain period in 1980s, when people met each other they would not talk anything else but business and money. Such as" Hey, I got 100 tons of steel. You want?" or " My friend called me,he said his friend wanted to buy 500 tons of cement, do you have?" Unfortunately, I was one of them. Funny and crazy, eh?

Let's go back to the two cultural types. The literati elite group are educated to have a great expectation to serve the country when needed. "The rise and fall of the country, every man is responsible for". When the country calls for your service, you just go for it no matter what sacrifice is required. They are trained under the strict principles of five fundamental virtues: Benevolence, Righteousness, Ceremony, Knowledge, and Trustworthiness. They are still the highest criteria for Chinese. People like to use some or all the five criteria to judge if a person is worthy to make friends. In their eyes, a merchant is treachery and shrewd because making money is the sole objective.

Pop Culture, on the other hand, is more realistic and accessible to most ordinary people. While the Pop culture shares the same sense of responsibility and part of the basic criteria it is more remarkably characterized as following.

1) To judge by the old generations' judgement, or by following the set habits; whether or not to make decisions is subject to majority's opinions;

2) More emotional involvement into thinking and judgement. In many cases,human relations are critical factors for people to decide who is or is not capable of a job. People may overlook the importance of rationcination and reasoning;

3) Preference applications and utilizations to theoretical research; prefer seeking utility to studying theory. For example, more than 900 years ago, a book titled "Meng Xi Bi Tan" was published in China in the descriptions of the many scientific achievements that have reached the highest level in the world. Dr.Joseph Needham, the British expert in History of Science said , "Meng Xi Bi Tan" is "the coordinates of the history of Chinese science." Its 26 volumes covered across the fields of astronomy, mathematics, physics, chemistry, earth science, biology and metallurgy, machinery, construction, paper-making in all aspects of technology, content.. Yet, China is still left behind to the advanced science and technology from the western world.

4) Lacking of interest of accuracy and quantification. The agricultural society has made people impatient at careful study and quantified verification. People like to say such words as "almost" "I guess", "the chances are..". Estimation and whole numbers are preferred. " Cha Bu Duo" (almost) and "Mei Wen Ti"(no problem), Those who are working or doing business in China must be very familiar with the two Chines phrases.

My suggestion: when you hear "Cha Bu Duo" , you'd better ask: Cha Duo Shao?"(How much is your almost?)

Additional Info about Chinese Culture and Marketing 5/10/09

Source: XinLang Keji( Sina.com, one the major Chinese search engines in China)

On May 8th & 9th , Microsoft held a new product exhibition in Beijing. It is called "Initial Experience of Windows 7 RC" The purpose of this exhibition was to provide visitors an immediate chance to experience Windows 7 RC. Over one hundred major media agencies from all over China were invited to attend.

Mike Nash, the VP of MS Windows Products told the media on site that, MS Vista has been released more than two years in China and barely made any sales. He commented that it was not accurate to say that we didn't sell any Vistas here in China. We did make sales actually. But Chinese customers refused to embrace Vista. It is because the customers who bought the Vista system first didn't have a good feeling for it because of the issue of incompatibility to many application programs. Most of the early buyers thus made no good comments on Vista. And they went to the internet or their friends' circles with such opinions on Vista even after the Vista PS1 was released later. "Word of Mouth " has an enormous influence on people's purchasing habits in China. That brought a huge negative impact on Vista sales later. Some customers even degraded their new Vista systems to XP.

Based on the setback of Vista sales, Microsoft took a new strategic approach for Windows 7, in a hope that a good "Word of Mouth" promotion could bring great sales of W7 in China. These Chinese media agencies will hopefully go back to their territories with a good impression and excellent comments on W7. Then their comments will be widely quoted and spread on hundreds and thousands online Chinese communities.

Good luck, Mr. Mike Nash!

Then my points

Don't underestimate the power of the local culture to your business. Obviously culture is not everything, but it is really something very much to your initial marketing. "Word of mouth" is one of the oldest marketing strategies. However,Chinese people have the tendency to listen to their friends.You'd better know a little about their habits first.

Always make a well-planned marketing strategy and find a good marketing strategist who knows the Chinese culture better than most other people, including millions of Chinese. One of your best choices will be me and SinoBiz Online Marketing Consulting.( www.sinobizonlinemarketing.com)

There are a lot of comments and requests for my articles . I appreciate all of them whether they are for or against my viewpoints. Reading those responses, I have a strong feeling that I need to put more efforts on talking more about Chinese culture and its relationship/impact on business, on Chinese decision-making modes, and etc. So I decide that, from the next article on I'll begin to write and post discussions on Chinese culture and its influence to Chinese business practice. The topics will cover religions, history, literature, operas, customs and habits in various places, and famous Chinese characters like Confucius, Sun-tzu and others, plus how these factors are related to the contemporary life in China and so on, so forth. I believe people should know and understand what are real Chinese culture's effects on business practices.

It is my sincere hope that people will benefit, more or less ,from the first-hand information about China and its culture based on my over 30 years of business experience and researches.

Chinese Culture and Marketing 5/8/09

From recent Chinese news report in China,, I noticed some interesting news. So I pull it together and show as following. What I try to make an effort is to show people who are interested to know how Chinese culture effects business practice.

"Xiao Shen Yang" or Little Shen Yang is the name of a young comedian who has become a most popular star after his funny street-taste performance on 2009 China's Spring Festival annual TV gala. Soon after that he becomes one of the hottest stars in China. And he is also the most controversial performer. Some people dislike him while he enjoys a booming reputation and huge success. From the news report, his annual income for the year of 2009 is estimated to go beyond 100 million yuan( Chinese currency., equivalent to $15 millions US dollars). Just think about this fact, less than two years ago, he only got 500 yuan of reward for stage show. Personally I may not appreciate some of his shows and his style. But I do admire his story of success. He was born and brought up in a rural family in Northeast China. In China, a person from rural area usually means less or no chance in life comparing to one in urban area. This is a pretty sad and negative side in Chinese culture and exists for hundreds of years. His success , to certain extent, reflects that one can also succeed from scratch in China. China is changing.

More news about Little Shen Yang. Two days ago, a piece of hot news was highlighted in Chinese media: Little Shen Yang and their group were forced to pay for meals on route of road show. I am going to the details of the dispute. It turned out that two parties(the local sponsor and the performance group) have misunderstood on the contract. I saw the disputing clause. In fact, the clause was defined in a very broad and unclear term. The reason why they didn't pay attention to details, is said that, among other causes, the local sponsors "thought" the group knew terms in contract. So what we can learn from above? When you sign a contract in China, never be afraid of painstaking effort and review clause by clause to avoid unnecessary disputes in future. I wouldn't say that Chinese business people like to take advantages, rather I'd intend to point out that , in Chinese culture, "friendship" or "relationship" often effects business deals. It is really a double-blade sword. You will get tons of benefits from this kind of friendship or relationship"guanxi" while you may get hurt on the other hand.

In many cities and towns in China, a popular event or activity is getting hot and hot. It is called Marriage Matchmaking Interviews. Hundreds of thousands of single men and women come to meet in a public place, a park, for example. They get to know each other and explore a possible chance for another meeting which can lead to a marriage in future. It sounds funny and interesting? The more interesting thing is that many parents join the meetings, acting as a kind of judges for pre-screening. It is an old tradition. I don't mean anything bad or negative here. My point is, China now has the largest population of netizens(308 millions) and cellphone users.(500~600 millions) . Plus the young Chinese generations of 80s and 90s have the widest open minds to embrace any new ideas from the outside world , either fantastic or incredible. Still they cannot escape from the traditional culture that is deeply rooted in every body's heart. People need to add this factor into consideration of marketing in China.

In school I was laughed at by a group of non-Chinese students when I raised that cultural understanding is the foremost and the best access to a successful business in a foreign country. They argued that business was business. Culture has a little influence on a deal.

What do you say?

On China economy 5/6/09

News Reading Note from Duowei News

The Chinese government has just publicized the economic figures of the first quarter in 2009. The average GDP increase at the national level was 6.1%. Suffering from the global economic crisis, Shanghai, Zhejiang province, and GuangDong (Canton) province were ranked almost to the bottom of the list as reported by Xueying Li, a reporter at Beijing Media Center of a well-known HK newspaper. The reporter also pointed out, that central and west China have made eye-catching achievements and innovative progress. Most of these administrative districts have even seen with a double digit jump in terms of Industrial Added Value. For example, the Bohai Sea Economic Ring, centered by Tianjin City( near Beijing), ranked at the top of the list with a staggering increase of 16%. Some experts from the governmental departments commented that the economic crisis has accelerated the adjustment of economic development pattern in China. Economy is getting hot in the central and the western parts of China as well as the pan-Bohai Sea Economic Ring in the North.

An official at Beijing said the big drop of economic progress along the coastal area is mainly due to their high reliance on exports. The impact was felt in that area during the downturn of the global economy. However the inland regions have been long engaged in the domestic market in China. Therefore they have not been affected severely by the crisis across the globe. On the contrary, they are gaining great momentum because the central government took measures to expand domestic demand.

From the point of view of a senior expert in the China National Statistics Bureau, the economic development in Canton, Shanghai and other Southeast China coast areas have built a solid foundation from many years of growth. There is a comparatively stable market mechanism running within the regional economy. In addition to that, a number of experienced administrators and entrepreneur are highly capable of overcoming and surviving the crisis.

It may also be a good thing at certain point that the economic tsunami put a great impact on the coastal areas in China. A large number of issues and concerns have arisen out of the economic development from the past years. They have remained unsolved. It is critical for the people to ponder over and to find better approaches.

In China, there are 31 districts of provincial administration. According to the national statistics bureau, 21 of these districts are seeing a stable return in industrial growth. That is to say an impressive 70% out of the total districts are improving. That is an important indicator of the economy recovery in China.

Cultural Reference for Marketing in China

5/3/09

Cultural Reference for Marketing in China

In 2005, a survey was conduct in Beijing business community. The result was revealed that nearly half of the survey participants agreed on a fact: there are commercial circles existing in China with a strong characteristics of geographic difference. Total 45 circles or communities have been identified. Hence an old yet current topic has been discovered and discussed nationwide since then.

In Chinese, the commercial circle is called "Shang Bang", or the Merchant Group( I invented this term since I could not find a proper phrase in English. I'd appreciate if you can find the perfect term)

Then what are the main features of a MG( merchant group)?

The MG was estimated to start to form in considerable groups in the 14th century, and culminated in the second half of the 19th century( before 1864).

Those business people were bound closely because they came from the same towns or villages, spoke the same dialect, and went to meet each other in designated houses/halls while on business trips. There were 10 different MGs formed during the period of time. Among them, well known groups were Shanxi Group, Yangzi Area Group, and Canton Group.

Shanxi Group was famous for finance and banking. Their powerful financial management group controlled almost the entire nation's banking business. Yangzi Group traded throughout the whole country as well as the overseas trades to Japan. The Canton Group started in southeast China and grew into HK and the Southeast Asia.

Now they are all history. Instead, five new major MGs are popular across the country. They are named Zhejiang, ShanDong, Southern Jiansu, Southern Fujian, and the Pearl River Delta. If one has the knowledge of China's geography, one will find out the fact, all the five MGs are located in the coastal areas.

According Yang Yong Ping, the reporter from the newspaper "The Private Ownership Operations", the five new MGs have very remarkable features.

ShanDong Group covers cities of QingDao, WeiHai, Yantai and JiNan in North China. The people of this group are pragmatic and shrewd at the same time. This business model is strongly influenced by "State-run Ownership". An enterprise's success or failure is closely connected with the local government's strategic decisions.

Collectivism or a strong "team work spirit" is the best description for the Southern Jiangsu Group who are scattered around the cities of SuZhou, WuXi, ChangZhou in Jiangsu Province. This group is deeply rooted in local traditional culture. They advocate and hold on beliefs of balance, collectivism and hierarchy.

ZheJiang Group, covers WenZhou, NingBo, TaiZhou and HangZhou, areas around in ZheJiang Province . The local culture emphasizes characters, individualism, and ability. The people are tough and endurable, have strong ambitions. WenZhou Model is known as their typical term. They build business foundations through hard-working and painstaking challenge, and develop from family workshops into modern private enterprises.

"Success comes out of unyielding struggle" has become the slogan sign for the group of the Southern Fujian Group. They are located in cities of QuanZhou, ZhangZhou, and XiaMen. Most of them are family business.

The Pearl River Delta Group. They are full of pioneer spirit, shrewd and applicable, experienced at trading.

China has developed three most active economic regions. These five MGs are right in the three regions. They have created the most competitive industries, such as IT at the Pearl river Delta, Textile, leather shoes and hardware manufacturing in Zhejiang, the sport shoes from the Southern Fujian Province.

Merchant Group is now just a concept in the sense of culture. They are different from the Chambers of Commerce.The latter is administrated by local authority. However, an interesting thing is that business people prefer the sense of group rather than going to the chambers for assistance.